MBA 2019-21 BATCH

SEMESTER III
GC 302 DECISION SCIENCE
UNIT 1.3.3: TRANSPORTATION

Dr. Yogesh W Bhowte

MODELS: VAM

1 Dr.Yogesh W Bhowte
 302 DECISION SCIENCE:
UNIT 1.3.3: TRANSPORTATION MODELS
Methods of obtaining Initial Feasible Solution:
Vogel’s Approximation Method (VAM)
It is a heuristic method, superior than the other two and gives

Dr. Yogesh W Bhowte

an initial solution close to an optimal solution. It is also
called as penalty or regret method.
Step 1: Compute penalties for each row and each column.
The penalty for a row/ column is the difference between the
least and second least transportation cost of that row/
column. This difference indicates the opportunity cost/
penalty. If there are two cells with same lowest cost, then
the penalty is zero
Step 2: Select the row/column with highest penalty and mark 2
it by an arrow
 302 DECISION SCIENCE:
UNIT 1.3.3: TRANSPORTATION MODELS
Methods of obtaining Initial Feasible Solution:
Vogel’s Approximation Method (VAM)
Step 3: Select the least cost cell in the marked row/ column

Dr. Yogesh W Bhowte

and allot maximum possible units to that cell. One row or
column got exhausted by this, cover that row / column by a
line as no further allocation will be made to this row/
column.
Step 4: For the reduced matrix follow the same procedure till
the allocation is complete.
All this can be carried out in a single table or prepare
separate tables for each step.
3
 302 DECISION SCIENCE:
UNIT 1.3.3: TRANSPORTATION MODELS
Practical Examples on VAM:
Qu.1) Obtain the initial solution for the following
transportation problem by using VAM

Dr. Yogesh W Bhowte

1 2 3 Supply
A 10 3 9 400
B 12 10 5 300
C 8 11 12 300
Demand 200 300 500 1000

Solution: Check whether the problem is balanced one. As the

total supply= total demand the problem is a balanced 4
transportation problem.
 302 DECISION SCIENCE:
UNIT 1.3.3: TRANSPORTATION MODELS
VAM: Compute penalties for each row /column.
1 2 3 Supp Penalti
ly es 1

Dr. Yogesh W Bhowte

A 10 3 9 400 9-3=6

B 12 10 5 300 10-5=5

C 8 11 12 300 11-8=3

Deman 200 300 500 1000

d
Penalti 10-8=2 10-3=7 9-5=4
5
es 1
 302 DECISION SCIENCE:
UNIT 1.3.3: TRANSPORTATION MODELS
VAM: Column 2 with highest penalty select it.
1 2 3 Supp Penalti
ly es 1

Dr. Yogesh W Bhowte

A 10 3 9 400 9-3=6

B 12 10 5300 10-5=5
C 300 11-8=3
Deman 200 8 300 11 500 12 1000
d
Penalti 10-8=2 10-3=7 9-5=4
es 1 1
6
 302 DECISION SCIENCE:
UNIT 1.3.3: TRANSPORTATION MODELS
VAM: Allot maximum possible to lowest cost cell of column2
1 2 3 Supp Penalti
ly es 1

Dr. Yogesh W Bhowte

A 10 3 9 400 9-3=6
300 100

B 12 10 5 300 10-5=5
C 8 11 12 300 11-8=3
Demand 200 300 0 500 1000
Penalties 10-8=2 10-3=7 9-5=4
1 7
 302 DECISION SCIENCE:
UNIT 1.3.3: TRANSPORTATION MODELS
VAM: Allot maximum possible to lowest cost cell of row B
1 2 3 Supp Penalti
ly es 2

Dr. Yogesh W Bhowte

A 10 3 9 400 10-9=1
300 100

B 12 10 5 300 12-5=7
C 8 11 12 300 12-8=4
Demand 200 300 0 500 1000
Penalties 10-8=2 1 9-5=4
2 8
 302 DECISION SCIENCE:
UNIT 1.3.3: TRANSPORTATION MODELS
VAM: Allot maximum possible to lowest cost cell of row B
1 2 3 Supp Penalti
ly es 2

Dr. Yogesh W Bhowte

A 10 3 9 400 10-9=1
300 100
B 12 10 5 300 0 12-5=7
300 2
C 300 12-8=4
8 11 12
Demand 200 300 0 500 200 1000
Penalties 10-8=2 1 9-5=4
2
9
 302 DECISION SCIENCE:
UNIT 1.3.3: TRANSPORTATION MODELS
VAM: Allot maximum possible to lowest cost cell of C row
1 2 3 Supp Penalti
ly es 3

Dr. Yogesh W Bhowte

A 10 3 9 400 10-9=1
300 100
B 12 10 5 300 0 2
300
C 300 12-8=4
8 11 12 3
Demand 200 300 0 500 200 1000
Penalties 10-8=2 1 12-9=3
3
10
 302 DECISION SCIENCE:
UNIT 1.3.3: TRANSPORTATION MODELS
VAM: Allot maximum possible to lowest cost cell of C row
1 2 3 Supp Penalti
ly es 3

Dr. Yogesh W Bhowte

A 10 3 9 400 10-9=1
300 100
B 12 10 5 300 0 2
300
C 300 12-8=4
8 11 12 100 3
200
Demand 200 0 300 0 500 200 1000
Penalties 10-8=2 1 12-9=3
3
11
 302 DECISION SCIENCE:
UNIT 1.3.3: TRANSPORTATION MODELS
VAM: Allot maximum possible to lowest cost cell of C row
1 2 3 Supp Penalti
ly es

Dr. Yogesh W Bhowte

A 10 3 9 400
300 100 100
B 12 10 5 300 0 2
300
C 300 3
8 11 12 100
200 100
Demand 200 0 300 0 500 200 1000
100
Penalties ----- 1
12
 302 DECISION SCIENCE:
UNIT 1.3.3: TRANSPORTATION MODELS
VAM:
1 2 3 S P1 P2 P3
A 10 3 9 400,100, 0 9-3=6 10-9 1
300 100

Dr. Yogesh W Bhowte

B 300, 0 10-5=5 12-5 …..
12 10 5 2
300
C 300 ,100,0 11-8=3 12-8 4
8 11 12 3
100
200 0 300 , 0 500, 200
D 200, 1000
100, 0
P1 10- 10-3=7 9-5=4
8=2 1

P2 2 ……..
P3 2 …… 12-9=3 13
 302 DECISION SCIENCE:
UNIT 1.3.3: TRANSPORTATION MODELS
Solution: The initial solution as per VAM
Supply To Units Cost/unit Total cost
From allotted

Dr. Yogesh W Bhowte

A 2 300 3 900
A 3 100 9 900
B 3 300 5 1500
C 1 200 8 1600
C 3 100 12 1200
Total Units 1000 Cost 6100

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 302 DECISION SCIENCE:
UNIT 1.3.3: TRANSPORTATION MODELS
Practical Examples on VAM:
Qu.2) Find the initial basic feasible solution of the following
transportation problem

Dr. Yogesh W Bhowte

D1 D2 D3 D4 Supply
O1 10 20 5 7 10
O2 13 9 12 8 20
O3 4 15 7 9 30
O4 14 7 1 0 40
O5 3 12 5 19 50
Demand 60 60 20 10

Solution: Check whether the given problem is balanced one and 15

then reconstruct the matrix and solve the TP
 302 DECISION SCIENCE:
UNIT 1.3.3: TRANSPORTATION MODELS
Solution: VAM Compute Penalties
D1 D2 D3 D4 Supply Penalty

O1 10 20 5 7 10 7-5=2

Dr. Yogesh W Bhowte

O2 13 9 12 8 20 9-8=1

O3 4 15 7 9 30 7-4=3

O4 14 7 1 0 40 1-0=1

O5 3 12 5 19 50 5-3=2

Dema 60 60 20 10 150
nd
Penalt 4-3=1 9-7=2 5-1=4 7-0=7
16
y
 302 DECISION SCIENCE:
UNIT 1.3.3: TRANSPORTATION MODELS
Column D4 has highest penalty allot to it as maximum as possible
D1 D2 D3 D4 Supply P1

O1 10 20 5 7 10 7-5=2

Dr. Yogesh W Bhowte

O2 13 9 12 8 20 9-8=1

O3 4 15 7 9 30 7-4=3

O4 14 7 1 0 40 30 1-0=1
10
O5 3 12 5 19 50 5-3=2

Dema 60 60 20 10 0 150
nd
P1 4-3=1 9-7=2 5-1=4 7-0=7 17
 302 DECISION SCIENCE:
UNIT 1.3.3: TRANSPORTATION MODELS
Row O4 has highest penalty allot to it as maximum as possible
D1 D2 D3 D4 Supply P2

O1 10 20 5 7 10 10-5=5

Dr. Yogesh W Bhowte

O2 13 9 12 8 20 12-9=3

O3 4 15 7 9 30 7-4=3

O4 14 7 1 0 40 30 7-1=6
20 10 10 2
O5 3 12 50 5-3=2
5 19
Dema 60 60 20 0 10 0 150
nd
P2 4-3=1 9-7=2 5-1=4 1 18
 302 DECISION SCIENCE:
UNIT 1.3.3: TRANSPORTATION MODELS
Row O3 has highest penalty allot to it as maximum as possible
D1 D2 D3 D4 S P3

O1 10 20 5 7 10 20-10:10

Dr. Yogesh W Bhowte

O2 13 9 12 8 20 13-9:4

O3 4 15 7 9 30 0 15-4:11
30
O4 14 7 1 40
0 2 14-7:7
20 10 30 10
O5 3 12 5 19 50 12-3=9

D 60 30 60 20 0 10 0 150

P3 4-3=1 9-7=2 …….. 1 19

 302 DECISION SCIENCE:
UNIT 1.3.3: TRANSPORTATION MODELS
Row O1 has highest penalty allot to it as maximum as possible
D1 D2 D3 D4 S P4

O1 10 20 5 7 10 0 20-10 4

Dr. Yogesh W Bhowte

10
O2 13 9 12 8 20 13-9

O3 15 7 9 30 0 ….. 3
30 4
O4 14 7 1 0 40 14-7 2
20 10 30 10
O5 50
3 12 5 19
D 60 30 60 20 0 10 0 150
20
P4 10-3=7 9-7=2 …….. … 1 20
 302 DECISION SCIENCE:
UNIT 1.3.3: TRANSPORTATION MODELS
Column D1 has highest penalty allot to it as maximum as possible
D1 D2 D3 D4 S P5

O1 10 20 5 7 10 0 ……. 4

Dr. Yogesh W Bhowte

10
O2 13 9 12 8 20 13-9= 4

O3 15 7 9 30 0 ….. 3
30 4
O4 14 7 1 0 40 14-7 2
20 10 30 10 7
O5 50 30
3 12 5 19
20
D 60 30 60 20 0 10 0 150
20 0
P5 13-3=10 9-7=2 …….. … 1 21
 302 DECISION SCIENCE:
UNIT 1.3.3: TRANSPORTATION MODELS
No need to calculate penalties as single column left
D1 D2 D3 D4 S

O1 10 20 5 7 10 0 ……. 4

Dr. Yogesh W Bhowte

10
O2 13 9 12 8 20
20
O3 15 7 9 30 0 ….. 3
30 4
O4 14 7 1 0 40 2
10 20 10 30 10
O5 50 30
3 12 5 19
20 30
D 60 30 60 50 20 0 10 0 150
20 0 30 0
5 …….. … 1 22
 302 DECISION SCIENCE:
UNIT 1.3.3: TRANSPORTATION MODELS
D1 D2 D3 D4 S P1 P2 P3 P4 P5
O1 10 10 20 5 7 10, 0 2 5 10 10 …..
O2 20 9 20, 0 1 3 4 4 4
13 12 8

Dr. Yogesh W Bhowte

O3 30, 0 3 3
30 4 15 7 9
O4 0 40,30,0
1 6
14 10 7 20 1 10

20 3 30 12
O5 5 19 50,30,0 2 2
D 60 30 60 ,50 20 0 10 0 150
20 0 30, 0
P1 1 2 4 7 As only one column is left
P2 1 2 4 …… after 5th cycle of penalties,
P3 1 2 …… ….. allocation to be based on
P4 7 2 ….. ….. lowest cost first.
23
P5 10 3 ….. ……
 302 DECISION SCIENCE:
UNIT 1.3.3: TRANSPORTATION MODELS
Solution: The initial solution as per VAM
Supply To Units Cost/unit Total cost
From allotted

Dr. Yogesh W Bhowte

O1 D1 10 10 100
O2 D2 20 9 180
O3 D1 30 4 120
O4 D2 10 7 70
O4 D3 20 1 20
O4 D4 10 0 0
O5 D1 20 3 60
O5 D2 30 12 360
Total Units 150 Cost 910 24
 Dr. Yogesh W Bhowte
End of Lecture 1.3.3

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